High-cost installment loans: No improvement over pay day loans

High-cost installment loans: No improvement over pay day loans

Like storefront pay day loans, deposit advance had been marketed as an intermittent bridge up to a consumer’s payday that is next. But in addition like storefront pay day loans, these bank items caught borrowers in long-term, debilitating financial obligation.

But banking institutions destroyed desire for deposit advance compliment of 2013 regulatory guidance instructing banking institutions to evaluate borrowers’ ability to repay their loans according to income and costs. Now, amid a tempest of deregulation in Washington, the banking industry is pressing regulators to let them back to the lending game that is payday. They should be aware of better.

The American Bankers Association called on the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to back off their 2013 guidance, the FDIC to withdraw different guidance dealing with overdraft protection and the Consumer Financial Protection Bureau to withdraw its proposed rule on small-dollar lending in a recent policy document. Continue reading